Smith & Wesson Brands, Inc. reported that profits on an adjusted basis fell 61.5 percent in the fiscal second quarter ended October 31, on a 3.9 percent revenue gain. The firearms maker continues to see healthy sell-through of its products and forecasts fiscal Q3 sales to climb in the range of 8 percent to 10 percent.

Second Quarter Fiscal 2026 Financial Highlights

  • Net sales were $124.7 million, a decrease of $5.0 million, or 3.9 percent, from the comparable quarter last year.
  • Gross margin was 24.3 percent compared with 26.6 percent in the comparable quarter last year.
  • GAAP net income was $1.9 million, or $0.04 per diluted share, compared with $4.5 million, or $0.10 per diluted share, for the comparable quarter last year.
  • Non-GAAP net income was $2.0 million, or 4 cents per diluted share, compared with $5.2 million, or 12 cents per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for net income exclude costs related to the relocation and the grand opening of the Smith & Wesson Academy.
  • Non-GAAP Adjusted EBITDAS was $15.1 million, or 12.1 percent of net sales, compared with $19.1 million, or 15.0 percent of net sales, for the comparable quarter last year.
  • Net cash provided by operating activities was $27.3 million, an increase of $34.7 million over the comparable quarter last year.

Mark Smith, president and chief executive officer, Smith & Wesson Brands, commented, “We were pleased with our second quarter results, which continue to demonstrate the strength of the Smith & Wesson brand, the ongoing success of our innovation strategy, and our disciplined focus on managing operations and allocating capital. As we anticipated, excellent efficiency in our business operations allowed us to deliver solid profitability of $15 million of Adjusted EBITDAS on net sales of nearly $125 million. We also saw great results on our balance sheet, with a significant reduction in inventory thanks to our disciplined sales & operations planning process. This generated a healthy operating cash flow of over $27 million in the quarter. Further, our new products continued to be a significant catalyst, accounting for 38.7 percent of sales in the quarter.”

Deana McPherson, executive vice president and chief financial officer, Smith & Wesson Brands, stated, “Distributor inventory in terms of actual units declined by over 5 percent from the end of the prior quarter and by 15 percent compared with the end of October 2024. This indicates continued positive sell-through of our products at retail and a good position for us as we look forward to the coming months. Although we continue to see uncertainty regarding macro-economic conditions, including tariffs, we believe that the strength of our brand, product assortment, and new product offerings should allow us to continue performing well. Therefore, we expect our third-quarter sales to be 8-to-10 percent over our Q3 fiscal 2025 sales with no significant impact, either positively or negatively, from channel inventory. Consistent with our capital allocation strategy, our board of directors has authorized a $0.13 per share quarterly dividend, which will be paid to stockholders of record on December 18, 2025, with payment to be made on January 2, 2026.”

Image courtesy Smith & Wesson